EUR/USD has refreshed its yearly lows and settled below 1.1400. On the 4-hour chart, the pair is trading near 1.1350, already below the highlighted 1.1400-1.1470 support zone, therefore this weakens the short-term technical picture, as former support now becomes the nearest resistance area.
Fundamental drivers
The dollar gained support after a more hawkish signal from the Fed. The regulator kept rates at 3.50-3.75%, but the market is pricing in the risk of a rate hike later in 2026 due to persistent inflation and energy-related risks. The backdrop for the euro is weaker: the ECB appears less inclined toward aggressive tightening, while soft business activity data and weakness in Germany are increasing concerns about a slowdown in the eurozone economy.
Technical picture
The break below 1.1400 confirms the development of a bearish impulse. As long as EUR/USD remains below 1.1400-1.1470 and the moving averages on the 4-hour chart point lower, the base-case scenario remains bearish. The nearest downside targets are 1.1300 and 1.1250, while a recovery above 1.1470 would ease pressure and could trigger a correction toward 1.1550.
Risks and upcoming events
The market remains focused on fresh inflation data, PMI releases, and comments from Fed and ECB officials. Any signs of accelerating prices in the US could further support the dollar, while weak eurozone data would add pressure on the euro. For EUR/USD, the key question is whether the pair can quickly return to the 1.1400-1.1470 range; if not, sellers will retain the advantage.
Conclusion
At this stage, EUR/USD remains under pressure due to diverging expectations for Fed and ECB policy, dollar strength, and the technical break of key support. Rebounds toward 1.1400-1.1470 still look more corrective than trend-reversing unless they are confirmed by strong buyer momentum and an improvement in the eurozone news backdrop, which is consistent with the points already made in the article EUR/USD hits multi-week lows amid stronger dollar.
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